Texas AG Demands Documents From Over 1,000 Cities in Property Tax Compliance Investigation

The sweeping investigation targets cities across Texas, including major municipalities like Houston, Dallas, San Antonio, Fort Worth, and El Paso, to verify compliance with Senate Bill 1851's financial transparency requirements. Under the law passed during the most recent legislative session, cities must complete and publicly post annual financial audits by specified deadlines or face restrictions on property tax increases.

The Attorney General's office is scrutinizing whether municipalities are meeting audit and transparency requirements before attempting to raise property taxes on residents. "I will not allow any Texas city to unlawfully increase taxes," Paxton said in a statement. "That is why my office is reviewing the actions of over 1,000 cities to ensure that they are complying with transparency requirements and not attempting to illegally raise property taxes."

Senate Bill 1851 creates a direct enforcement mechanism by prohibiting municipalities that fail to meet auditing and transparency requirements from increasing property tax revenue beyond the previous year's level. Cities must complete annual financial audits and make them publicly available by statutory deadlines to maintain their ability to raise property tax rates.

This represents Paxton's second round of document demands to cities under the new law, indicating ongoing enforcement efforts as municipalities enter a new fiscal year. The investigation spans cities of varying sizes across the state, from major metropolitan areas to smaller municipalities like Conroe, Sugar Land, Galveston, Lubbock, and Wichita Falls.

"I am demanding that cities prioritize transparency and work to minimize the tax burden of every citizen across the state," Paxton said. "While many cities have complied with these requirements, I will continue to fight to ensure that every municipality across our state is following the law."

The Attorney General's office has established a complaint mechanism for Texas residents who believe local officials are violating SB 1851's audit requirements and unlawfully raising taxes. The complaint form allows citizens to report potential violations directly to the AG's office for investigation.

The investigation reflects broader Republican efforts in Texas to constrain local government tax authority and impose transparency requirements on municipal finances. The outcome could affect property tax policies across hundreds of Texas cities and establish precedent for enforcement of the state's municipal audit requirements.